CONTRACTUAL INTEREST RATE NORMALLY BECOMES THE POST-JUDGMENT INTEREST RATE
The Divisional Court, contending with a default judgment rendered on a credit card debt, had to reverse a few things that the Small Claims Court Deputy Judge did incorrectly. To this end, the following principles emerge on these topics:
a) POST JUDGMENT INTEREST RATE. This issue arose because the Deputy Judge erred in denying post-judgment interest at the contractual rate. In this regard, the judge granted prejudgment interest at the contractual rate of 19.8% per annum, but then reduced the post-judgment interest rate to the amount prescribed by the Courts of Justice Act (which would be 2%). The Deputy Judge provided no reasons for doing this. The appellate court confirmed that the proper approach is to grant the contractual rate for post-judgment interest, absent any exceptional circumstances that would warrant lowering the rate. By way of suggestions, this could include situations where the credit card agreement is vague or unclear, or perhaps where the interest rate derived from the written agreement infringes a statutory provision such as the Interest Act (see for example: Capital One Bank v. Matovska, [2007] O.J. No. 3368 (Ont. Div. Ct.)).
b) START DATE FOR POST-JUDGMENT INTEREST. This issue arose because the Deputy Judge ruled that the starting date for post-judgment interest was the day following the judgment. The appellate court highlighted that post-judgment interest commences on the day the decision is made. The appellate court recognized that this is not a big issue monetarily, but it was of sufficient importance to highlight the correct approach based on section 129(1) of the Courts of Justice Act, so that there was a consistent approach to awards of interest in the Small Claims Court; and
c) COSTS. This issue arose because the Deputy Judge denied, without reasons, certain expenses and costs being claimed by the Plaintiff. Although the appellate court acknowledged that reasons do not have to be lengthy or particularly detailed, the reasons must, at the very least, explain why the decision was reached and thus allow for proper appellate review. Absent any explanation, over what appears to be uncontroversial claims for costs, there was “good reason to doubt the correctness of the costs order made by the Assessment Judge.” The appellate court then proceeding to award the amounts sought for costs, including $100 for preparing the plaintiff’s claim, $197.75 for service of the plaintiff’s claim (which was complicated), and $120 court fee for filing the plaintiff’s notice of motion and supporting affidavit.
Capital One v. Jonathan, 2022 ONSC 836
https://www.canlii.org/en/on/onscdc/doc/2022/2022onsc836/2022onsc836.html